French Tresor

Without getting into too much detail, these bonds pay a smaller fixed coupon (between 2% and 4%) to which the accumulated inflation in that period is added. By mid-2003 the French Tresor had already issued five different inflation-linked OATs, three of them referenced to French inflation and two of them linked to Eurozone retail prices. The success of these bonds has recently permitted their launch via normal auctions, rather than syndicate issues. As of July 2003, they represent more than 10% of the French bond annual supply. 

Such syndicated issues have also been used by some of the larger Debt Agencies such as Spain and Italy, to distribute their long-term bonds more efficiently. The French Tresor has used this procedure for the launch of its inflation-linked bonds. 

Anyone who thought that the advent of a Eurozone inflation-linked bond would cause the French CPI linked bonds to wither on the vine has been proved mistaken. Agence France Tresor (AFT) has continued to reopen the two OATi issues, and demand for these, and the domestic inflation-linked bonds of CADES (a government-owned institution created to repay past social security liabilities), has been sufficiently strong for AFT to issue a new 10-year OAT (2.5% July 2013), in January 2003. 

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